For the year ended december 31, 2013, lopez company has implemented an employee bonus program equal to 3% of lopez's net income, which employees will share equally. lopez's net income (prebonus) is expected to be $1,400,000, and bonus expense is deducted in computing net income.

1.

$42,000

2.

Dr. Bonus Expense                   $42,000

Cr. Employees Bonus Payable $42,000

3.

Dr. Employees Bonus Payable $42,000

Cr. Cash                                      $42,000

Explanation:

As Bonus is Based on the Net Income value

Net Income (pre bonus) = $1,400,000

Bonus rate = 3% of Net Income

Bonus value = $1,400,000 x 3% = $42,000

2.

A liability is created while recording the expense of the bonus. Expense has debit nature so, it is debited to record it and Liability has credit nature so, it is credited.

3.

As cash is paid, to reduce the amount of cash, we credited the cash account because it has debit nature as an asset.

Liability is paid off, to reduce the balance of liability we have debited the liability account because it has credit nature.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

1. avoid them

2. a talk with them

3. ask someone you trust

4. ignore

5. call police